Lithuania’s defence procurement agency fined €484,000 over unlawfully signed Rukla barracks contract

Lithuania’s Infrastructure Management Agency has been fined nearly half a million euros for signing a €19.4 million contract with a construction firm that submitted forged bank guarantee documents, the state broadcaster LRT reported Tuesday.

The Kaunas Regional Court ruled on May 4 that the agency had unlawfully awarded the contract for renovating Rukla military barracks—intended for German troops—to Consolius LT, after the company provided a fake guarantee from the Luxembourg branch of Japan’s Sumitomo Mitsui Trust Bank. Despite the fraud, the court upheld the contract due to “geopolitical circumstances and international obligations,” but imposed a 2.5% penalty of the contract’s value (€484,000) for procedural violations.

The renovation must be completed by April 2028, the court stressed, as delays could outweigh the benefits of canceling the agreement.

Forged documents and ignored warnings
Rival bidder Versina, which placed second in the tender, alerted the agency after discovering discrepancies in the guarantee. The company contacted the bank and confirmed the documents were forged, including a fake power of attorney for an Italian signatory, M. S., and a counterfeit ID copy of a lawyer, A. K., who denied any involvement.

The agency dismissed these findings, arguing that official submissions from Consolius LT took precedence over Versina’s email correspondence with the bank. It claimed it had no obligation to verify signatures or contact the bank directly unless “objective doubts” arose—despite the forged evidence.

Consolius LT’s defence rejected
The winning firm argued it had no reason to suspect fraud, as its Kaunas-based insurance broker, FT Broker, had vetted the guarantee. It also claimed the bank had confirmed its ability to issue such guarantees in the future. However, the court found that Consolius LT had never signed an agreement with the bank, failed to assess its own creditworthiness, and did not disclose the bank’s terms.

The firm paid €1,800 to insurer Draudita, which claimed to act as the bank’s intermediary, but the court ruled this did not absolve Consolius LT of responsibility for submitting a document signed by an unauthorised party.

Agency failed due diligence
The court determined that the Infrastructure Management Agency—overseen by the Ministry of National Defence—should have verified Consolius LT’s submissions. Both the agency’s inaction and the firm’s false information were deemed unlawful.

The ministry had previously told BNS that Consolius LT’s bid met all tender requirements and that its documents “raised no concerns.”